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Every successful small business owner knows that there’s nothing more important than keeping a close eye on the bottom line. Fortunately, there are a number of ways a small business can power up profits. Common income-boosting strategies include offering employees incentives to sell more, cross-selling and up-selling to existing customers, expanding your product line and optimising your prices.

On the flip side, reducing expenditures, negotiating better discounts with suppliers and securing more favourable terms on loans can provide equal improvements in profit margins.

Master the art of increased profitability and you will:
• Position your company for future growth in new markets.
• Forge strong relationships with lenders before you need them.
• Have a financial cushion if business slows down.
• Secure the financial resources to hire additional staff.

Action Steps to help you get it done:

Analyze your current financial position
Keeping a sharp eye on your balance sheet is a key requirement when it comes to improving profits. So learn how to perform a break-even analysis using Excel to analyse key performance measures such as cash flow and expenses.

Control expenses
It’s easy for expenses to get out of hand if you don’t have a systematic method for keeping track of what you’re spending. To ensure that you always have a current position of your daily, weekly and monthly expenses you need good small business accounting software and a reliable accountant who can help you.

Raise prices
Many small business owners are afraid to raise prices for fear of losing customers. But the truth is that most customers barely notice modest price increases, which can have a significant impact on your profits and bottom-line, it just requires a sensible approach to figure out what small increases work for you.

Sell more to existing customers
Acquiring new customers is wildly expensive. Focus on increasing revenue from existing customers and you’ll cut promotional expenses and increase profits at the same time, although it is worth mentioning that promotion of your company should never stop even to your existing customers.

Consider outsourcing
Focus on the key elements of your business and reduce personnel costs by outsourcing some of your back-office functions, such as human resources or technology services.

Tips&Tactics
Helpful advice for making the most of this Guide:

• Do a thorough analysis of your company’s current profitability and compare it with your industry’s average.
• Review both your fixed and variable expenses; cut out the fat, like expensive office furniture, but be careful about reducing benefits and personnel, which may send a negative message to your employees and the marketplace.
• Fully engage your employees in all expense and cost-cutting efforts; ask for their suggestions and give them incentives for helping you reach your profitability goals.
• If your company is currently posting healthy profits, apply for a line of credit now - before you actually need it.
• Consider adding additional products or services that will complement your current offerings but won’t demand additional marketing or advertising funds.